Black gold in peril. Oil prices fell on Friday, May 19, showered by the breakdown of negotiations around the American debt, which raises the specter of a default by the United States, with very uncertain consequences. The price of a barrel of Brent from the North Sea for delivery in July fell 0.36%, to close at 75.58 dollars. As for the American West Texas Intermediate (WTI), with maturity in June, it returned 0.43% to 71.55 dollars. Black gold had started the session with a bang, with WTI gaining as much as more than 2%, before a sharp reversal on news of a suspension of debt ceiling talks, according to Again’s John Kilduff. Capital.
Representatives of the Republicans in Congress have, in fact, suddenly left a meeting with members of the American government, according to the information site Punchbowl News. “We need to take a break,” Republican Speaker of the House of Representatives Kevin McCarthy told reporters on Capitol Hill about the executive branch negotiations. The White House has acknowledged that there are still “real differences” between the positions of the two camps.
“Fear of a recession”
Only Congress can raise the debt ceiling and prevent the United States from defaulting on payments, but the Republican opposition is refusing to do so for the moment due to the lack of sufficient budgetary concessions from President Joe Biden. “This is clearly a threat to the economy and energy demand,” argued John Kilduff. “Not just in the United States, worldwide.” For the analyst, the market limited its losses thanks to positive signs of American demand for refined products. The most traded US gasoline futures contract ended higher on Friday. He gained over 16% in two weeks.
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The gap between crude and gasoline prices is at its highest in a month in the United States, which constitutes an incentive for refiners to process more oil. Despite near-term uncertainty and fear of recession, “physical market fundamentals point to a tightening in the second half of the year (which would lead to higher prices), unless the greater fears about the global economy do not materialize,” say analysts at Eurasia Group.
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2023-05-20 07:50:07
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